Especially the article, “Forecasts That Missed By a Mile,” by Laura Lee, author of “Bad Predictions.” An arch-skeptic, Lee should be writing reviews of gurus’ predictions in Barron’s, CNBC and other financial news sources, the new Roger Ebert of the financial press. Here’s a few choice predictions to get you thinking:

The Presidency. “That’s an amazing invention, but who would ever want to use them?” President Rutherford B. Hayes to Alexander Graham Bell, 1876.

Great inventors. “I said to my brother Orville that man could not fly for 50 years. Ever since then I have distrusted myself and avoided all predictions.” Wilbur Wright, 1901.

Grade school evaluations. “It doesn’t matter what he does, he will never amount to anything.” Albert Einstein’s teacher to his father, 1895.

Government economic reports. “1930 will be a splendid employment year.” U.S. Department of Labor, 1929.

America’s leading newspapers. “The problem with television is that the people must sit and keep their eyes glued on the screen; the average American family hasn’t time for it.” The New York Times, 1939.

Computer wizards. “It would appear that we have reached the limits of what it is possible to achieve with computer technology.” Computer scientist John von Neumann, 1949.

University professors. “The concept is interesting and well-formed, but to earn better than a ‘C,’ the idea must be feasible.” Yale professor grading student Fred Smith’s proposal for Federal Express.

Bad predictions? And yet amusing. But get serious for a moment, what if – just what if – the basic assumption that the market always goes up turns out to be wrong in the 21st century – contrary to the prevailing trend of the 20th century?

What if the bull market is a “bad prediction?”

As I read the “Bad Predictions” article in The Futurist, I was reminded of some strong predictions made by futurist and demographer Harry Dent in his best-seller, “The Roaring 2000s.” He wrote: "We may be on the verge of the greatest stock market boom in history." In fact, Dent went on record predicting the Dow Industrials will hit 41,000 by 2008, based in part on a simple projection of 10% market growth plus baby boomer spending. But, could Dent be wrong?

Seriously, “what if?” What if all the great expert market predictors turn out to be wrong. Remember all these predictions of the Dow made by Harry Dent and nine other of America’s most-trusted market gurus? Put on your arch-skeptic’s hat for a minute. Ask yourself: What if all these expert predictions (which are based on rather conservative estimates of growth and inflation) are nevertheless “bad predictions?”

15,000 by 2005: Deutsche Bank economist Ed Yardeni

18,500 by 2006: Prudential's chief technician, Ralph Acampora

41,000 by 2008: Harry Dent, author of The Roaring 2000's

21,200 by 2010: Sheldon Jacobs, No-Load Fund Investor

30,000 by 2010: Frank Jennings, Oppenheimer Funds

36,000 by 2010: Hassett & Glassman, authors of Dow 36,000

49,200 by 2013: Investor's Business Daily projection

100,000 by 2020: Charles Kadlec, strategist at Seligman & Co

120,400 by 2025: Yale economist Roger Ibbotson

153,000 by 2023: Investor's Business Daily again

700,000 by 2047: Kiplinger's magazine editors

Take, for example, the optimistic and super-high-tech William J. O'Neil, publisher of Investors Business Daily. O’Neil put the “inevitable” historical up trend this way: "During the last 50 years, we have had 12 bull markets and 11 Bear markets. But guess what? The bull markets averaged about 100 percent going up and the bear markets, on the average, declined 25 percent to 30 percent. Not only that, the typical Bull market lasted 3.75 years and the classic Bear market lingered only nine months."

What if all the experts are dead wrong?

Seriously, focus on the tough question -- what if O’Neil, Kiplinger’s, and all the rest of these market geniuses are wrong? Dead wrong. Yes, all of them. What if, like lemmings, they are all using the same two basic historical assumptions which may be misleading everyone:

First: that the market will grow through the 21st century at an average 10% rate exactly as it has throughout the 20th century.

Second: moreover, these experts are assuming that past performance will, in fact, predict future results, contrary to one of Wall Street’s biggest warnings.

Bad predictions? Wrong assumptions? Wishful thinking? Maybe.

One of the experts, however, bucks the conventional wisdom, questioning the overall assumptions. Harry Dent notes that "consumer spending peaks around age 46,” or between 2010 and 2015 for the average boomer. But after that? A dark cloud looms on the economic horizon as boomer spending drops off. Dent believes that, in all probability, sometime after 2012 America may face an economic decline that triggers a bear market lasting for a decade or longer.

Is Dent’s prediction a “bad prediction?” Or am I, like so many other quixotic and overly-optimistic investors, simply deluding myself with an overdose of wishful thinking because I want to believe the market will continue advancing past 41,000 in 2008 to 49,200 by 2013, and on to 700,000 by 2047?

New ‘echo boomers’ driving America’s economy

Disturbed, I quickly turned the pages. Fortunately, the answer was close at hand, in Mark Alch’s Futurist article about “The Echo-Boom Generation, A Growing Force in American Society.” Reading it left me pleased to discover that Dent misjudged a huge demographic tsunami following on the heels of the baby boomers. And here’s why:

Faulty statistics leads to bad predictions. “Fears of financial ruin and age wars have accompanied the maturing of the huge baby boom generation as it moves inexorably toward retirement. Their life savings are jeopardized by the much smaller number of GenXers replacing them as taxpayers, home buyers and investors.

Too few GenXers to bail out boomers? “The financial well-being of the 77 million baby boomers is now largely in the hands of 44 million GenXers, young adults born from 1965 to 1976. Housing, financial investment markets, and Social Security could all be affected. Everything in the economy will be implicated, from buying replacement homes, filling in for workers retiring in the years 2008 to 2034, keeping university enrollments at the current levels, and bolstering a potentially defaulting Social Security system.

New echo boomers driving America’s economy! “But the economic landscape is not as dire as some financial dooms-dayers have prophesied, because the generation following Gen X, the echo boom (those born from 1976 to 1997) is 80 million people strong, the largest ever.

Huge new market. “These young people have $150 billion in direct purchasing power today, and about $500 billion in indirect purchasing power.

Early in the game. “Well-informed and media-savvy, echo boomers display a strong work ethic and have grown up understanding the digital economy.

High tech savvy. “They are comfortable with changes brought about by the new technology and e-commerce just starting to come into its own on the Internet.

Tuned in leaders. “More than any previous generation, they are becoming conversant with a communications revolution transforming business, education, health care, entertainment, government, and every other institution in our society.

Powering the market. “The echo boom will add millions of people to the ranks of the labor force, so a small change in the numbers of those deciding to invest their money rather than spend it would show dramatic gains in real estate and the stock market, including mutual funds.”

“The echo-boom generation does not appear to be a group of self-indulgent, gratification seeking, irresponsible shoppers. Surveys show them to be strong advocates for social responsibility. Like their parents, the baby-boom generation, they care about the world, the environment, poverty, and global issues in general.”

Optimists use bullish ‘facts’ for predictions

But please take note. I’m a total optimist. Before I collect any data, I collect optimistic, bullish predictions. Lots of them. Probably to prove to myself and everyone else that the market will, in fact, continue on a bullish trajectory upward.

Notice how I went out of my way to “disprove” the one exception to my collection of bullish market predictions. That is, the research on Echo Boomers “proves” Dent is wrong about the market dropping. And, of course, that arms me with even more “proof” that the bull market will continue advancing. Why? Simply because the aging baby boomers will be replaced by the echo boomers as they become the new engine driving America’s economy after 2012.

But am I kidding myself? Well, I suppose that’s always possible. I guess it’s possible that the market won’t grow at a 10% rate in the 21st century. And that bonds will out-perform stocks. But I seriously doubt it – hey, I’m a full-fledged optimist and bull. Can’t help it.

The coming 20-year global economic boom

Listen to his optimistic prediction for the next couple decades, from Kevin Kelly, founder of Wired magazine: “The 20-Year Global Economic Boom.” For Kelly, the opportunities of the near future are a function of much more than just demographic trends:"At this particular moment in our history, the convergence of a demographic peak, a new global marketplace, vast technological opportunities, and a financial revolution will unleash two uninterrupted decades of growth." .

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